GOLDEN VALLEY, Minn. - The average American changes jobs more than 10 times during their career, often accumulating a variety of retirement plan accounts that are not well unattended.

If you're like most people, you may have left them there simply because you weren't quite sure what to do with them.

Dan Ament, Financial Advisor with Morgan Stanley in Wayzata, visited KARE 11 Sunrise to talk about what to do with your old 401(k).

Keep it in a 401(k) Plan

  • Leave it with your old plan - Depending on your retirement plan rules, you may be eligible to leave your plan where it is. (Caveat - some plans force you to roll out if you have a small balance) The key is whether you like the plan investment options and associated expenses.
  • Roll it to a new 401(k) - If you are employed and have access to a new 401(k) you will likely have the opportunity to consolidate (roll over) your former retirement plan account into your new plan. Again, it is important that the new plan offers a competitive offering of investment options and features for you to manage your nest egg.
  • Legal troubles? Keeping funds in a 401(k) account can provide additional protection from legal judgments.

Roll it to an IRA - Rolling your 401(k) to an IRA may provide you with a greater array of investment alternatives versus most 401(k) plans which offer a limited menu of options. If you already have an IRA established, you can use this opportunity to consolidate your retirement accounts to reduce the head ache of having multiple accounts to monitor and manage. Understand that pursuing a rollover to an IRA may also require you to incur certain expenses when purchasing investments or maintaining your account. Weigh the potential costs against the benefits offered to determine if it is the right choice for you.

Assess your total allocation - This is the most important exercise regardless of the decision made above. Gather all of your account statements and assemble a summary of your total household investment portfolio, breaking down the values by asset class (ie, large growth, international stock, intermediate bond, etc). This exercise will allow you to better assess investment areas you have too much exposure and areas that could be worth considering additional investments. Most importantly, it will help you determine whether the risk you are assuming is appropriate for your specific circumstances.